Apr 01, 2022

Incentivise customers with these proven reward ideas

According to Peter Drucker, the founder of modern management thinking, the true purpose of a business is to create and keep customers.

And thankfully for business, owners a lot of research is contunually being undertaken to understand the impact of creating and keeping customers. For example, the Harvard Business Review recently reported that:

There are also many studies that show the power of customer rewards when trying to boost loyalty and increase conversions.

A KPMG report revealed that to earn a reward from a company’s loyalty programme, 60% of shoppers said they would shop at a store with a slightly higher price, and two-thirds of shoppers would make a special trip to shop at the store.

So, it's no wonder that businesses across the globe spend about $75 billion on customer loyalty management.

In this article, we'll do a deep dive into the power of customer rewards and reveal the best type of rewards to incentivise your customers to remain loyal, spend more, and refer their friends.

How to recognise and reward customers

Once a customer has made their first purchase, you have a window of opportunity to incentivise them to make a repeat purchase. One of the most effective ways of helping the relationship between the customer and your brand blossom is by introducing a customer loyalty programme.

This is where you show customers your appreciation for engaging with your brand (and encourage them to come back) by offering rewards in exchange for their loyalty.

Customer loyalty programmes are by no means a modern marketing tool. In the 18th century, merchants in the United States encouraged repeat business by offering customers copper tokens to redeem against future purchases.

Today, as well as rewarding customers for making purchases, businesses choose to offer customer incentives for the following reasons:

  • To encourage particular behaviours, e.g., signing up to a newsletter or leaving a 5-star rating or customer testimonial
  • As a goodwill gesture to compensate unhappy customers when things haven't gone exactly to plan
  • To motivate lapsed customers to re-engage with your brand and persuade them to start shopping with you again

Whatever reason you choose to reward your customers, the good news is that studies show they are an effective method of increasing customer engagement (and employee engagement). If a customer loyalty programme is on offer, 68% of regular customers will join it and rewards-based promotions can boost average profit margins by a healthy 62%.

The benefits of incentivising customers with rewards

As we touched upon in the introduction, offering customer rewards is an incredibly effective way to incentivise desired buying behaviours.

When it comes to boosting brand loyalty, 77% of customers agree that loyalty rewards programmes make them more likely to continue doing business with a brand. And with 85% of business growth coming from loyal customers, incentivising loyalty should be a business priority. It's no wonder that best-selling author and king of sales Jeffrey Gitomer describes customer loyalty as 'priceless'.

As for giving sales numbers a prosperous lift, evidence confirms shoppers will adjust their spending habits to make the most of the customer rewards that are on offer. Plus, current customers spend 30% more than new customers and are 50% more likely to try new products.

Customer rewards can also increase your customer base as shoppers are more likely to recommend your brand to others if you have a good rewards programme.

From a customer perspective, businesses that offer rewards make them feel valued, which increases customer satisfaction and their allegiance to your brand. And in turn, for your business, this is highly likely to lead to:

  • An increase in the overall lifetime value of your customers
  • Greater marketing effectiveness and profitability
  • Superior annual performance improvements

The best rewards to incentivise customers

Gift cards

Gift cards are the number one most requested gift according to the National Retail Federation. Our own research has also uncovered that 81% of loyalty programme members prefer to redeem points for gift or prepaid cards and that using gift cards in promotions can increase annual revenue by 37%.

No matter what demographic your target audience may be, gift cards will prove popular with 97% of boomers, 96% of generation X, 91% of millennials, and 78% of generation Z using them in the past 12 months.

The allure of gift cards is so strong in fact that 63% of shoppers spend more with a brand after receiving a gift card and 75% of shoppers prefer prepaid gift cards over cash as a financial incentive.

So, why are gift cards so popular?

  • They're a guilt-free reward: Whereas cash rewards are often used to pay off bills or to cover monthly outgoings, gift cards are seen as a perfect excuse for shoppers to treat themselves
  • They offer more choice: As opposed to receiving a one-size-fits-all reward, gift cards offer recipients the freedom to choose something for themselves
  • They're easy to redeem: In a digital age, gift cards are an attractive reward as they can be used both in-store and online, and offer a safe payment mechanism that shoppers can trust

Another advantage of gift cards is that they can be personalised with your company logo, the customer's name, and a short message. Not only does this mean that your customers have a reminder of your brand in their physical or virtual wallet or purse, but research has shown that 80% of consumers are more likely to do business with a company that offers a more personalised experience.

Our wide range of popular gift cards will put your customers in control of their rewards by giving them the freedom to choose from a number of household names. From dining out to fashion and beauty, your customers can spend them with popular brands such as Boots, H&M, John Lewis, M&S, Pizza Hut, Sainsbury's Tesco, and WHSmith.  


We live in a digital age. By 2025, an estimated 65 million people in the UK will have a smartphone. That's why digital customer rewards, such as eGifts are increasingly popular with shoppers and outperforming physical gift cards, according to the UK gift card and voucher association. Millennials, in particular, prefer digital redemption of rewards, especially with online retailers.

One immediate benefit of eGifts is that they offer customers instant rewards, which is particularly important when having to wait for rewards is the biggest frustration for customers.

Research has shown that this is a major focus for generation Z who prefer customer loyalty programmes that offer instant gratification. The coronavirus pandemic has also seen a shift in consumer behaviour, with 44% preferring digital cards more now than in pre-Covid times.

For a business, digital products such as eGifts are appealing as there are no production or shipping costs involved in the distribution process. All that's needed is a customer email address and the eGift card can be quickly, easily, and instantly.

For example, many leading brands use our end-to-end disbursement platform, Select, to send eCodes directly to customers or receive the eCodes in bulk to distribute as and when needed. 

Recipients can redeem the eGift with a huge variety of dining, entertainment, fashion, travel, and home and garden brands. You can also personalise the eGift card with your branding and track how they're spent, which gives your invaluable marketing insights.

Multi-brand gift cards

One potential issue with customer reward programmes that consistently offer the same reward is that shoppers will look elsewhere for different rewards from your competitors.

For this reason, multi-brand gift cards are a great solution as they give each and every customer the freedom to make a personal choice. The same gift card can be used to enjoy a meal out, buy a new outfit, or for home improvements.

To give your customers maximum choice, our One4all gift card range can be redeemed both in-store and online with more than 140 popular retailers. It's the simplest and easiest way to let your customers choose their own reward.

All you need to do is let us know how much value to add to each gift card and whether you'd like us to customise them with your company branding.

An experience to remember

It's important to take the time to consider the needs of your target audience when choosing customer rewards. For example, if your target demographic is largely made up of Millennials, it's good to know that 72% of Millennials prefer experiences over material things.

So, you might want to consider personalising your gift cards with photos and messaging that make them more memorable, so that receiving them is more of a positive experience that they will associate with your brand.

Another way of providing customers with experiential rewards is to use our Envy Experience packages. There are more than 5,000 real-life experiences to choose from including relaxing spa sessions, delightful afternoon teas, fun family days out, and unforgettable balloon rides.

As with our gift card range, you, as the business owner, choose the price point and the experience vouchers can be personalised with a message.

Whatever rewards you choose to incentivise your customers, make it easy for them to access their loyalty programme profile so they can track their available rewards and monitor when rewards expire.

Ready to incentivise your customers with proven rewards?

Blackhawk Network is a global industry leader when it comes to customer rewards.

  • 37,000 corporate and government partners
  • Serving brands in 28 countries
  • £4 billion+ rewards fulfilled each year
  • 775 million gift cards issued annually

When you need a trusted customer rewards partner, we're perfectly placed to help incentivise your customers to remain loyal to your brand.

To discover the Blackhawk Network difference, get in touch today on 020 4517 5862.